Which of the following is NOT true when there are large economies of scale such that one firm can produce at a lower average cost than can be achieved by multiple firms?
A) This situation produces a natural monopoly.
B) Proportional increases in output yield proportionally small increases in total cost.
C) The long-run average cost curve of the firm will increase at a low level of output.
D) There will only be one firm in this industry.
C
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A currency depreciation
A. reduces aggregate demand and increases aggregate supply. B. reduces aggregate demand and aggregate supply. C. increases aggregate demand and reduces aggregate supply. D. increases aggregate demand and aggregate supply.
Refer to Figure 9-3. Without the quota, the domestic price of peanuts equals the world price which is $2.00 per pound. What is the quantity of peanuts demanded by domestic consumers in the absence of a quota?
A) 10 million pounds B) 28 million pounds C) 30 million pounds D) 40 million pounds
In a free market system, competition generates economic efficiency only when
A) individuals take into account the full opportunity cost of their actions. B) consumers are motivated by a sense of the greater good, not their own self-interest. C) firms are motivated by a sense of the greater good, not their desire for profit. D) economic decisions are taken out the hands of individuals and placed in the hands of government officials.
Moe divides his time between studying Physics and studying Economics. His production possibilities curve for his final grade in each class is shown in the accompanying figure.
According to Moe's PPC, moving from a 70 to an 80 in economics:
A. is inefficient. B. has a higher opportunity cost than moving from an 80 to a 90. C. has a lower opportunity cost than moving from an 80 to a 90. D. is unattainable.